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LONDON (Alliance News) - Worthington Group PLC Monday said it has entered into an agreement with Greenland Rare Earth Projects over rare earth element projects in the Paatasuq area in Greenland.
Worthington will provide funding to explore part of Greenland's Gardar Alkaline Igneous Province and has secured a deal to buy up to 41% of Greenland Rare Earth Projects.
Under the deal, Worthington will provide immediate funding of GBP550,000 via a loan convertible into 20% of the company's ordinary share capital. In addition, Worthington has an option to buy a further 10% for GBP1.2 million within one year, subject to performance and exploration results and an option to buy another 11% within two years.
To finance the deal, Worthington will place up to GBP450,000 in unsecured convertible loan notes.
"Whilst this is an investment in the exploration phase of this project, it borders areas of proven reserves in the Motzfelt field," said Worthington Group Chief Executive Doug Ware.
"If the reserves are proven, then we are looking at what could amount to enormous potential returns given the rising demand," he added.
Worthington Group shares were up 44.6% to 46.3 pence in early trading Monday, making it the biggest riser on the London market.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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